The American Jewish Joint Distribution Committee has disciplined at least two employees for their role in what the organization is calling “in inappropriate financial transaction,” according to a press release issued by the organization.

It is unclear exactly what transpired and whether or not any money went missing.

But, “In the fall of 2009, we began receiving specific allegations that in 2006 four JDC Israel-based employees in our Former Soviet Union Department were involved in an inappropriate financial transaction of under $30,000 in a court case in Moldova,” said JDC CEO Steven Schwager in the statement released late Tuesday.

Two of the employees have been disciplined and warned that a repeat of their behavior would lead to dismissal. The other two “are no longer working for the organization,” according to the statement. It is unclear if they were fired.

The Joint has directed its internal auditors “to perform a full audit of JDC’s controls and protocols governing financial transactions both in Jerusalem and at the organization’s field offices in the Former Soviet Union,” the statement said.

When asked for more detail about the matter, a Joint spokesman said only, “The statement is the statement. We have nothing more to add.”

Here is the statement:

Israel-Based JDC Employees Disciplined after Investigation

NEW YORK, NY, May 12, 2010 – Four Israel-based employees of the Former Soviet Union Department of JDC Israel were involved in activities that did not conform to the standards JDC expects of its staff, a JDC-initiated investigation has found. Two of the four employees are no longer working for the global Jewish philanthropy, while the two others have been disciplined and warned that a repeat of such behavior will result in their dismissal, JDC says.
“In the fall of 2009, we began receiving specific allegations that in 2006 four JDC Israel-based employees in our Former Soviet Union Department were involved in an inappropriate financial transaction of under $30,000 in a court case in Moldova.” said JDC CEO Steven Schwager.
“In accordance with our Board’s established whistleblower policies, the matter was referred to our outside counsel and to JDC professional and lay leadership. It was determined that a full investigation should be conducted using Israeli-based outside counsel. While the investigation could not confirm these allegations, it concluded that these staff members did not adhere to the standards JDC expects of its employees.”
JDC has also directed its New York-based internal auditors to perform a full audit of JDC’s controls and protocols governing financial transactions both in Jerusalem and at the organization’s field offices in the Former Soviet Union. Once it is complete, the results of that review and a corrective action plan will also be shared with JDC’s Audit Committee.
“JDC prides itself on its transparency and accountability over donor-provided funds,” said Schwager. “In this one instance, we did not live up to our own standards. I am deeply disappointed and embarrassed by what happened. It was not what I expect of our employees – and the donors who support us and the people who depend on us expect us to be better than this. We are confident that the new procedures will ensure, as far as possible, that it does not happen again, and we will maximize our efforts to maintain the highest standards,” he said.
Over the last several years, JDC has also received several other complaints alleging improper activities including those on construction projects in the Former Soviet Union. Each complaint was also reviewed by outside counsel and also investigated by forensic accountants and other experts, and no evidence of wrongdoing was found in any of these other situations. Nonetheless, as a result of those reviews, further improvements were made in JDC’s standard operating procedures.

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